Location: Philadelphia-Camden-Wilmington, PA | Metro: Philadelphia-Camden-Wilmington, PA-NJ-DE-MD MSA
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $2,030 |
| 1 Bedroom | $2,190 |
| 2 Bedrooms | $2,620 |
| 3 Bedrooms | $3,120 |
| 4 Bedrooms | $3,440 |
| 5 Bedrooms | $3,990 |
| 6 Bedrooms | $4,469 |
| 7 Bedrooms | $4,827 |
| 8 Bedrooms | $5,068 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $2,190 | $231,256 | 0.95% | C |
| 2BR | $2,620 | $397,069 | 0.66% | D |
| 3BR | $3,120 | $736,321 | 0.42% | F |
U.S. Census Bureau data (2024)
The Section 8 thesis for ZIP code 19107 in Philadelphia, PA, centers around the significant gap between the Fair Market Rent (FMR) and the market rent. The FMR for ZIP 19107 in fiscal year 2024 is set at $2590, while the actual market rent, as indicated by the Zillow Rent Index (ZORI), stands at $1995. This creates a discrepancy of $595 per month, representing a 30% difference between the two figures.
Given that the FMR exceeds the market rent, properties participating in the Section 8 program can offer competitive yields to landlords and small-portfolio investors. In Philadelphia, where 83.8% of residents are renters, the demand for affordable housing is high. The median home value in the city is $313,353, and the median income is $69,105, indicating a strong need for subsidized housing options.
Voucher tenants under the Section 8 program provide a stable source of rental income, often with lower vacancy rates compared to the open market. The government guarantees payment up to the FMR, ensuring that landlords receive a fixed amount regardless of the market conditions. This makes it an attractive investment strategy for those looking to capitalize on the yield potential in areas with high rental demand and low median incomes.
However, landlords must be aware of the costs associated with housing voucher tenants. These include administrative burdens, such as managing lease agreements and dealing with the Housing Authority, as well as potential maintenance issues. Despite these challenges, the financial support from the government helps mitigate risks and ensures a steady cash flow, making it a viable option for real estate investments in Philadelphia's ZIP 19107.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). Demographics from U.S. Census (2024).
About FMR: Fair Market Rent (FMR) is used to determine payment standards for the Section 8 Housing Choice Voucher program, initial renewal rents for some expiring project-based Section 8 contracts, and rent ceilings for HOME Investment Partnerships.